Dan Walters

With the state budget mired in deficits, Gov. Jerry Brown and legislators, especially his fellow Democrats, are searching under every fiscal rock for money to spend.

That search has spawned an odd syndrome involving what could be three big pots of money – a competition among liberals over how they should be spent if, indeed, they materialize.

The pots:

• What could be several billion dollars a year in “cap-and-trade” fees that industries must pay as part of the state’s anti-greenhouse gas crusade.

• Another billion-plus bucks that it’s believed would appear were the state to change taxation of multi-state corporations by adopting the so-called “single sales factor.”

• A billion-plus dollars in low-income housing funds gathered by local redevelopment agencies before Brown and the Legislature put them out of business.

By law, the cap-and-trade funds must be used for greenhouse gas reduction. But they could be indirectly captured to offset state budget deficits by allocating them to existing state operations tied to carbon reduction, thus freeing up money for other areas facing cuts, such as health and welfare services.

Liberal legislators appear to be leaning in that direction, but Brown has indicated that he wants cap-and-trade money to be the backstop for his pet project, a statewide bullet train system, which otherwise is very short of money. However, the Legislature’s budget analyst and other authorities opine that the money could not legally be allocated to the bullet train.

There are several bills kicking around to spend the corporate tax proceeds.